Update: The talks are not going well today, Sunday, July 24th. John Boehner said, “I know the president’s worried about the next elections, but my God, shouldn’t we be worried about the country?”
The S & P warned that a Moodys downgrade of our credit rating could lead to a death spiral in the bond market according to Newsmax. Moodys and S&P are the “we want more taxes” people because it’s the easy way out. They are the same people who gave triple A ratings to the subprime market the week before it crashed.
Cut, Cap and Balance was quickly rejected Friday with no opportunity for debate. The debt ceiling talks appear to have collapsed. John Boehner, Speaker of the House, said that after a deal was reached, Obama then demanded $400 billion in taxes from the very people who can restore our economy – the job creators. Boehner repeated his prior statement that dealing with the White House “has been like dealing with jello.”
From Business Insider…President Barack Obama announced Friday in a fiery press conference that Speaker of the House John Boehner has pulled out of talks to raise the debt limit and lower the deficit.
Obama said he offered Republicans a “fair” deal only to be “left at the altar” by Boehner. He added that the deal would have cut over $1.8 trillion in spending, while raising $800 billion in revenues from closing corporate loopholes.
Boehner said Obama moved the goalposts on revenues once he saw the “gang of six” proposal earlier this week — that “it was the president who walked away from his agreement.” Obama denied that, saying if the deal agreed to was unbalanced, it was unbalanced in the direction of needing more revenues…Read more here: Business Insider
The President has denied that he pulled a fast one at the end and asked if Republicans can say “yes to anything.” There will be talks at the White House tomorrow.
President Obama has not offered a specific debt ceiling plan – there is nothing in writing. Obama said he wants a balanced plan – the balanced plan means a balance between more taxes and some cuts, mostly in the future . Republicans believe the taxes on upper income, which is possibly the bulk of the new taxes, will hinder job creators at a time when we have record-high unemployment.
Obama said the Republicans don’t want to pay the bills. No Republican has ever indicated that they do not want to pay the bills and Obama is setting up a straw man.
Republicans want limits to D.C.’s unfettered spending of the taxpayer’s money. The polls do not seem to be with them though they have a strong argument. President Obama’s angry speech yesterday went over convincingly to the public at large.
Will it become a “crisis?” No one knows how the markets will react and we don’t know how Moodys will deal with our government’s inability to resolve our problems. We also don’t know if President Obama will choose to make it more of a “crisis” than it has to be by choosing to not pay those who will blame Republicans. He also could invoke the 14th Amendment, establish a socialist-style government or do any number of things. Will this become a “crisis” too good to waste?
The fact is, neither side trusts the other. The President has not offered a plan – he’s offered vague generalities and cuts in the “off years,” which could easily be withdrawn. The cuts will only be cuts to the deficit spending and would only mean that the spending will move more slowly. No one is talking about real cuts – thus the need for a balanced budget amendment, which is not happening any time soon. This government will not stop spending until forced to do so by an amendment or a bankruptcy. Read here: Cut, Cap and Balance Defeated